VirginiaLaborLaw.com
What Government Contractors
Need to Know About Executive Order 13495
“Nondisplacement of Qualified Workers
Under Service Contracts”
Raymond L. Hogge, Jr.
Hogge Law
Attorneys and Counselors at Law
500 E. Plume Street, Suite 800
Norfolk, Virginia, 23510
(757) 961-5400
[email protected]
This presentation is intended solely for informational purposes
and is not offered as legal advice
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Overview of E.O. 13495
When a service contract succeeds a contract for
performance of the same or similar services at
the same location, the successor contractor is
required to offer the predecessor contractor’s
qualified service employees, whose
employment will be terminated by the
predecessor contractor,
a right of first refusal of employment.
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Definitions
A “service contract” is a contract or subcontract
for services entered into by the Federal
Government or its contractors that is covered
by the Service Contracts Act of 1965.
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Definitions
“Contractor” means a prime contractor and all
of its first or lower tier subcontractors.
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Definitions
“Service employee” means a person engaged in
performance of a service contract other than
a person employed in a bona fide executive,
administrative or professional capacity
as defined in 29 CFR Part 541.
Therefore, E.O. 13495 does not protect
“managerial” and “supervisory” employees.
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Applicability
E.O. 13495 applies to service contracts that
succeed contracts for the same or similar
service at the same location
(other than those exempted
or subject to a waiver).
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Exemption: Contracts Below Simplified
Acquisition Threshold
Contracts and subcontracts under the
simplified acquisition threshold are exempt
from E.O. 13495.
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Exemption: Contracts Below Simplified
Acquisition Threshold
If prime contract meets the simplified
acquisition threshold but subcontract does not,
then prime contractor is required to comply
with E.O. 13495 but subcontractor is not.
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Exemption: Contracts Below Simplified
Acquisition Threshold
If prime contractor above threshold terminates
subcontractor below threshold and takes over
performance of subcontractor’s services, then
prime contractor must offer employment to
subcontractor’s service employees who would
otherwise be displaced.
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Exemption: Contracts Under
Programs for Disabled
Contracts awarded under certain programs for
handicapped are exempt from E.O. 13495.
• Javits-Wagner-O’Day Act
• Sheltered workshop employing severely
disabled
• Randolph-Sheppard Act
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Exemption: Federal and Nonfederal Service
Contract as Part of Single Job
Employees hired to work under federal and one
or more nonfederal service contracts as part of
single job are exempt from E.O. 13495
“provided the employees were not deployed in
manner designed to avoid the purposes of”
E.O. 13495.
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Agency Waivers
Agency may waive some or all requirements of
E.O. 13495.
• Agency must make waiver determination no
later than the contract solicitation date.
• Agency must ensure that contractor notifies
affected workers and their bargaining
representatives in writing no later than 5
business days after solicitation date.
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Job Offers to Predecessor Employees
“A successor contractor of subcontractor shall
fill no employment openings under the
contract prior to making good faith offers of
employment in positions for which the
employees are qualified, to those employees
employed under the predecessor contract
whose employment will be terminated as a
result of the award of the contract or the
expiration of the contract.” 29 CFR 9.12(a).
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Job Offers to Predecessor Employees
Must offer “right of first refusal to employment
on the contract.”
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Job Offers to Predecessor Employees
Job offer may be oral or written.
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Job Offers to Predecessor Employees
Job offer must state time within which offer
must be accepted.
Deadline for acceptance of offer
cannot be less than 10 days from date of offer.
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Job Offers to Predecessor Employees
Job offer must be for position for which
employee is qualified.
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Job Offers to Predecessor Employees
Job offer need not be for job previously held by
employee at predecessor contractor.
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Job Offers to Predecessor Employees
Job offer may be under different terms and
conditions, including pay and benefits, as job
held with predecessor contracts, provided
reasons for difference is not related to a desire
that the employee refuse the offer or that
other employees be hired for the job.
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Job Offers to Predecessor Employees
Determinations of predecessor employee
qualification for job offer must be based on
employee’s educational and employment
history, with particular emphasis on experience
on predecessor contract.
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Job Offers to Predecessor Employees
Determinations of predecessor employee
qualification for job offer must be based on
credible information provided by a
knowledgeable source such as the predecessor
contractor, the local supervisor, the employee,
or the contracting agency.
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Job Offers to Predecessor Employees
Determinations of predecessor employee
qualification for job offer may be based on preemployment screening processes such as drug
tests, background checks, and security
clearance checks only if the processes are
(1) provided for by the contracting agency ,
(2) conditions of the service contract, and
(3) “consistent with” E.O. 13495.
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Job Offers to Predecessor Employees
Predecessor employee’s eligibility for job offer
usually will be based on the predecessor
contractor’s certified list of service employees
working under predecessor contract and
subcontracts during last month (30 days) of
contract performance.
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Job Offers to Predecessor Employees
In determining successor employee eligibility for
job offer, successor contracts must accept credible
evidence other than predecessor contractor’s
certified list of service employees.
• E.g.: Employee’s claim of assignment to work
on contract, verified by contracting agency staff.
• E.g.: Employee pay stub showing date and
location of work.
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Job Offers to Predecessor Employees
Successor contractor must make job offers even
if successor contractor has not been provided a
list of the predecessor contractor’s employees,
and even if the list does not contain the names
of all persons employed by predecessor
contractor during the final month of contract
performance.
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Job Offers to Predecessor Employees
Job offers must be “good faith”
and “bona fide.”
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Job Offers to Predecessor Employees
Offer presumed to be bona fide
• even if it is not for a position similar to one
employee previously held
• even if subject to different pay and benefits
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Exception for Jobs Held By
Successor Employees
Successor contractor may employ any of its
current service employees who
(1) have worked for successor for at least 3
months immediately preceding
commencement of successor contract; and
(2) would otherwise face layoff or discharge.
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Exception for Employee
Retained by Predecessor
Nor required to make job offer to predecessor
service employee who will be retained by the
predecessor contractor.
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Exception for Employee
Retained by Predecessor
Successor contractor must presume all
predecessor service employees working on
contract will be terminated unless successor
contractor can demonstrate reasonable belief
to the contrary based on credible information
from a knowledgeable source such as the
predecessor or the employee.
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Exception for Employee
Retained by Predecessor
Successor contractor must presume all
predecessor employees working on contract are
service employees unless successor contractor can
demonstrate reasonable belief to the contrary
based on credible information from a
knowledgeable source such as the predecessor,
the employee, or the contracting agency.
• Knowledge of general business practices of
predecessor or industry not sufficient.
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Exception for Employee
With Unsuitable Performance Record
Not required to make job offer to predecessor
employee who successor contractor
reasonably believes,
based on employee’s past performance,
has failed to perform suitably on the job.
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Exception for Employee
With Unsuitable Performance Record
Successor must presume that all predecessor
employees working on last month of contract
performed suitable work.
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Exception for Employee
With Unsuitable Performance Record
To deny offer based on unsuitable
performance, successor must be able to
demonstrate a reasonable belief of unsuitable
performance by the employee based on written
credible information provided by a
knowledgable source such as predecessor
contractor and subcontractors, local supervisor,
the employee, or the contracting agency.
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Reduced Staffing
Successor contractor may employ fewer service
employees than predecessor for the contract.
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Reduced Staffing
Successor contractor must offer employment
only to number of predecessor employees
which success reasonably believes necessary to
meet anticipated staffing pattern.
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Reduced Staffing
Where successor contractor does not initially
offer employment to all predecessor
employees, the obligation to offer employment
to the remaining predecessor employees
continues for 90 days after successor begins
performance of contract.
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Certified Service Employee Lists
Not less than 30 days before predecessor
contractor completes contract, predecessor
must provide contracting officer a certified list
of names and anniversary dates of all service
employees working under contract and
subcontracts (same as seniority list info under
Service Contract Act regs 48 CFR 52.222-46).
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Certified Service Employee Lists
If predecessor workforce changes after 30 day
list submitted, then predecessor must submit
to contracting office a revised service employee
list not less than 10 days before completing
performance on contract.
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Certified Service Employee Lists
Upon receipt of 30/10 day service employee list
from predecessor, contracting officer provides
list to successor contractor and, if requested, to
predecessor employees or their representative.
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Notification to Predecessor Contractor
and Employees
Contracting officer directs predecessor
contractor to provide written notice to
predecessor employees of possible right to
offer of employment from successor contractor.
A form notice is provided in
29 CFR Chapter 9 Appendix B.
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Notification to Predecessor Contractor
and Employees
Notice must be
• posted in a conspicuous place at worksite;
or
• delivered to employees individually.
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Notification to Predecessor Contractor
and Employees
If notice is delivered to employees by e-mail, it
must result in electronic delivery receipt or
some other reliable conformation of delivery.
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Notification to Predecessor Contractor
and Employees
Where a significant portion of predecessor
workforce is not fluent in English, the notice
must be provided in English and the
language(s) spoken by the employees.
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Notification to Predecessor Contractor
and Employees
Multiple foreign language notices are required
where significant portions of the workforce
speak different foreign languages and there is
no common language.
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Recordkeeping
No particular form of records required,
i.e., paper or electronic.
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Recordkeeping
Contractor must maintain copies of all
written job offers.
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Recordkeeping
Contractor must maintain contemporaneous
written record of all oral job offers, including:
• Date, location, and attendance roster of any
employee meetings at which offers were made
• Summary of each meeting
• Copy of any written notice of the meeting
• Names of all employees to whom offers made
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Recordkeeping
Contractor must maintain copy of any record
that forms basis for any claimed
exclusion or exemption.
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Recordkeeping
Contractor must maintain copy of the
employee list received from
the contracting agency.
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Recordkeeping
Contractor must retain required records for
not less than 3 years
from date records were created.
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To obtain a complementary copy of this
presentation, or for assistance in complying
with Executive Order 13495,
please contact Ray Hogge
at (757) 961-5400
or at [email protected]